A new law signed by Texas Governor Rick Perry reportedly changes the way the state regulates insurance and clears the way for Insurance Services Office, Inc. (ISO) to provide advisory information services to insurers for four lines of insurance — commercial auto, personal auto, homeowners and dwelling fire. The legislation also establishes new rate filing standards and procedures for these four lines.
ISO’s latest advisory services for these four lines in the Texas insurance market include:
· Advisory prospective loss costs — Loss costs are indications of insurers’ potential losses, based on aggregated data, from similar risks.
· Rules — Rules are sets of conditions under which insurers agree to underwrite a specific risk or a class of risk at a specified rate in a state.
· Standardized policy forms and endorsements — Standardized forms enable the aggregation of comparable statistics for analysis and help insurers resolve claims, set fair rates, share risks with reinsurers and reduce litigation over policy language interpretation.
Until the new law was signed on June 11, 2003, Texas prohibited insurers from using advisory organizations’ loss costs information on personal auto, homeowners and dwelling fire. The law also restricted the rates, rules and policy forms insurers could use in the regulated market for homeowners, dwelling, personal auto and commercial auto insurance.
Under the new law, which reportedly brings the Texas insurance market in line with the rest of the country, advisory organizations will be able to provide insurers the full portfolio of multistate products, including loss costs, rules and policy forms for these lines of insurance. The legislative change also enables insurers to use their multistate programs more easily in Texas.
“The new legislation streamlines the way insurers do business in Texas,” said Kevin Thompson, ISO senior vice president. “Instead of maintaining a separate Texas-specific company program, insurers can now use the ISO multistate program, making their in-state operations easier and more efficient,” he added.
ISO had previously filed and received approval for its homeowners and commercial auto insurance policy forms from the Texas Department of Insurance (TDI). ISO will file to remove various state exceptions to the commercial auto forms to bring them in line with the multistate program. ISO also will file its multistate dwelling and personal auto forms with the TDI as well as loss costs and rating rules for all four lines.
ISO will host two half-day seminars in October to review the impact of the new legislation on the Texas insurance market. The first, on Oct. 1, is at the Courtyard By Marriott near The Galleria in Houston. The Oct. 2 event is at the Crowne Plaza Hotel – North Dallas Addison. The seminars are complimentary but require advance registration, which closes on Sept. 26.
To register, visit http://www.iso.com/conferences/texas.
Was this article valuable?
Here are more articles you may enjoy.